tv Bloomberg Surveillance Bloomberg October 30, 2014 6:00am-8:01am EDT
vote. juan, they go in search of economic stability. good morning, everyone. it is "bloomberg surveillance." i'm tom kean. -- tom keene. let's go right to our top headlines. >> the federal reserve ending quantitative easing. that the, the fact economy is on the health of our said the economy does not need the help anymore. >> i think they will be quite measured when they start raising rates. my guess is that it would be in the second half of next year. >> the s&p 500 has increased
131% since the first round of quantitative easing began. rising tension over eastern europe. exercises have been described as those conducted during the cold war. the west is been highly critical of russia over the fighting in the ukraine. for a second straight day, president obama warned that quarantines and travel bans won't stop ebola. i want america to understand that the truth is that until we stop this outbreak in west africa, we may continue to see individual cases in america in the weeks and months ahead. because that is the nature of today's world. we can't hermetically seal
ourselves off. >> the state of maine has an ebola quarantine on a nurse who is fed up with being quarantined. hickox is in defiance of maine's governor. bankk's second-largest said profits unexpectedly rose in the third quarter. bank has set aside $800 million to settle allegations it rigged currency markets. it was very, very special. hydrometer truly in game seven of the world series last night. igh drama, truly, in game seven of the world series last night. it is all over.
the giants win a third world series in five seasons. rner was historic, brilliant and relief. no question about it, the m.v.p.. just extraordinary. bloody?is sock it was not. there was a missing element of drama. >> this was extraordinary, going back to sandy koufax. christie matheson was the modern workhorse. >> also the consistency that madbum has given the giants. it is remarkable. >> given the flatness of the season, what a way to end it. >> i think the san francisco giants fans would disagree with that. returnncle bob in omaha
-- reports that with a heavy heart he can return to work. [laughter] >> let's get a data check. yields, higher. euro, weaker. crew does not do much. -- crude does not do much. yen is weaker. abenomics does not do much. the ruble, there is the ruble. let's go to the bloomberg terminal. here is the jump condition. this is the janet yellen jump. moscow, we have a problem. the ruble is ever weaker. this is really something how the central bank of the world begins and ends in washington. >> we talk about this as if it is going to have an effect on vladimir putin. it has not. >> he is enjoying his approval
rating. >> russia buzzes in europe's airspace. ex, the market reacts. the focus for janet yellen is always the strange link between inflation and interest rates. we parachuted in a lady in green. she writes about the bond market. [laughter] she writes about people in the bond market. robert michael is a person in the bond market. [laughter] it is never dull. >> it is not. >> you look at the end of qe. what would you advise clients this morning about their fears of when the fed raises interest rates? >> i actually think the fed got it right. scarlett started in by saying easy money. case.s not actually the
you have zero interest rate policy and you are still running the fed rate. unless they get to zero or positive, that is easy money. clients should not be wary right now. >> we are returning to old normal easy money. >> that is a lot of adjectives. [laughter] i will go along with that. >> is it parsing the fixed income market? you say, now what across all assets? >> we have been saying now what across all assets for a while. people are looking at the pricing of different parts of the bond market. the fed started by calling out the bond market a few months ago and talking about high-yield and loans as being overvalued. much where credit is priced or where risk assets are priced. it has always been about real yields being too low and the
government market. >> we know the taper tantrum is also lisa tantrum at the desk. [laughter] what did you observe yesterday? what part of the bond market took the news most abruptly? >> people were hoping the fed would be a little more dovish and come out with a soothing credo to say we are holding your hand. their hopes were dashed. the most interesting things is that volatility has scared the fed in the past. here, we are seeing the opposite. they are saying, go forth and conquer. allow the volatility to come on up and let's see what happens. >> how much volatility can we tolerate? puts there a janet yellen out there. she could have been a lot more dovish. the very fact that she did not
suggested that they were ok with the volatility they have seen in the recent weeks and the correction in asset prices. i think they desire greater volatility in the markets. of course, they don't want runaway volatility. they want some control, but i think they left themselves enough leverage to pull. >> the dove this time was from the minneapolis fed who was worried about the possibility of not deflation, but less inflation. does it concern you that we are not close to 2%? >> it is supposed to be the ideal environment. inflation.y moderate when you look at the decline in inflation expectations, it is clearly being driven by energy prices. that should be a tail wind to the economy. i think it is a little bit off base, but i get the point. >> six weeks ago, bill gross was
unconstrained and said financial repression out to the end of the decade. the you agree? >> i think there will be a lot of elements across europe, possibly not in the u.s. >> we may actually make some money? >> yes, i think we're headed in that direction. >> can you write a story about that? >> it depends how quickly yields can rise. if they rise to quickly, it is not good for investors right now. >> look at this, the job interview for you. [laughter] >> here is a good story. in new jersey, governor chris christie marks the second anniversary of hurricane sandy by getting into it with the hecklers. this man interrupted a chris christie speech to protest the slow pace of rebuilding. here is what chris christie said. into are going to get debate and it is going to get
very interesting and very fun because somebody like you does damn thingw to do a but do something when the cameras around. sit down and shut up. >> i don't know if saturday night live could do a better job. [laughter] >> was he running for office right there? i think he was. >> this is why he was so popular. he is so good at channeling that. his popularity has nothing to do with policy or his record as governor. >> the heckler invited chris christie to dinner afterward. [laughter] >> he is as much playing for iowa there as he is for new jersey. became popular three youtube videos of these kinds of performances. he shouted down a teacher at a union meeting once. >> will this fly in the midwest?
>> it is soaring in the midwest. a meeting ofnt to republican lawmakers at the state level and they were desperate for chris christie to run. that was the cry. he is so good at this. i think it plays. >> the man invited chris christie to dinner and his response was classic. thousand about a things to do tonight and going to dinner to you -- with you is 1000th on the list. [laughter] then.minutes -- in. >> it is "bloomberg surveillance." five days away from the midterms. we have a lot more for you. "bloomberg surveillance." in the words of chris christie, shut up. >> sit down and shut up. [laughter] ♪
>> they are really one of the poster child's of responsibility in wealth investing. a lot of nations have adopted best practices from norway. >> the whole goal of having that fund is so that they can diversify the economy. norway is finding that to be a challenge. if norway is finding that to be a challenge, you have problems with others sow the friend -- sovereign wealth funds. >> has oil adjusted what you've done a jpmorgan? yet overe adjustments where oil is? >> it has. certainly, growth expectations have to rise because you get this tailwind.
i would not necessarily shed a tear for norway. [laughter] exporters.l if you are looking at the russian ruble, they are bringing in dollars, which are very high, and norway is doing in the same thing. norway is bringing in u.s. dollar assets. it is a mixed blessing. sovereign thatst japan,ed about it was when we talked about the impact of a higher currency. they have to import oil as their currency was declining and it became a huge turn for them. >> it has been a huge problem for nigeria. nigeria has to import oil because it does not have refining capacity. norway has a very robust sector. >> norway's sovereign wealth
fund has done interesting things. they have been moving into more assets they can yield a little more. i'm wondering how much will investors suffer in this high yield? does volatility matter? >> it matters quite a bit because they are always looking for opportunity. in our conversations with a lot of the sovereign wealth funds, they have a lot of cash to put to work. what has frustrated them over the last couple years has been the lack of volatility. they have not seen enough opportunity to put that money to work and they like this environment. it does not have to be the sovereign wealth funds. it could be official institutions in japan that are trying to diversify away from japanese government bonds. >> a lot to talk about here after janet yellen ends qe. we will continue the conversation on investment in our next hour.
do we need more training programs? good morning, everyone. "bloomberg surveillance." >> the fed has spoken. qe is over. investors are pricing in the guidance. the dollar strengthens. foley. us is jane we heard from a less dovish, more hawkish chair yellen in the statement yesterday. should the emphasis be on the dollar or are we really looking at a euchre -- weaker yen, we aker euro? >> i think it is a little bit of both. the u.s. is still doing pretty well, certainly compared with countries such as japan, certainly compared with the eurozone. you've got a situation whereby the japanese are doing huge amount of quantitative easing and their is no sign that they
are going to stop doing that. u.s. is far more mature and its economic cycle. , many of point of view the long dollar positions have been pared back. the dollar is still the best bet. dismiss any type of improvements in economic fundamentals? >> again, it a lot of priced into the dollar. the dollar bulls have been ready vocal for a lot of years -- pretty vocal for a lot of years. they have been wrong. finally, market positions have seemed to ratchet up. athink when we are looking japan, for instance, that what is a lot of disappointing news. this week am a have had good news in japan in production. it is still really poor.
>> let's look at dollar-yen. this is abenomics. call it abe strong dollar policy. his janet yellen the central banker to the world? whereuppose it depends you stand when you consider that. the u.s. economy is the biggest economy in the world, so she does have that mandate to set a point of view. that is not technically her mandate. first and foremost, she has to try to generate growth in the u.s. economy. we have had a lot of debate about this from the central bank governor in india saying that the fed need to be very careful about their policy because of the impact it has. >> that is the point. this is the key point this morning. janet yellen fx what goes on in other nations, whether it is malaysia or germany >>. >>i want to talk about the brazilian currency this morning.
they announced surprise rate hikes to control inflation. inflation is higher than estimated in brazil. they say there is going to be a fiscal adjustment that was described as violent. issue turning or flailing? -- is she turning or flailing? >> the market is very skeptical of this president. the market wants to see economic reforms. until we see those, the market is going to remain skeptical. that means the currency will remain on the back foot and that inflation pressure could continue to build. >> one last question. where does vladimir putin begin to worry about the ruble? the ruble weekends and weekends and weekends and weakens. at what point does it affect him? >> if we look at the opinion polls, he still has a lot of
popularity. it seems like the people like his strong line, strong-arm approach, but the economy really is suffering. we have higher inflation in russia. that is not a pretty situation at all. interestingto be through the winter to see how the polls to react. he seems to have a fold -- firm hand for now. >> jane foley, thank you for joining us. >> you see the volatility in the fx market. stay with us. ♪
ends sixal reserve years of bond buying known as quantitative easing. it added trillions of dollars to the fed balance sheet. the central bank still plans to keep short-term interest rates near zero for a considerable time. those are your top headlines. alan greenspan was a little critical. how about what the fed did? it is over. it is over for you, janet yellen, and even bill gross. it is over. robert michael has had a storied career in fixed income. are you managing for the coupon now? do you get your scissors out at j.p. morgan? >> there was a lot more to do in the bond market right now. >> such as? >> we were talking about high-yield earlier.
credit spreads are 4.5% and default rates are 1%. i would like to collect that 4.5%. how do i do that? >> when you do that, is high-yield another phrase for high risk? the energy prices, oil prices coming down, it is a fundamental threat to the oil companies. >> we learned this yesterday. they are a big part of the high-yield market. >> they have increased their proportion of debt in the total index dramatically, almost double the proportion in the past. >> do you worry about that? >> we do. that is the unanswered question. what will be the impact of the energy companies? historically, when you have had a decline in energy prices, it has boosted corporate earnings in the u.s., but now that energy
is such a much larger part of corporate earnings because of the investment in energy companies, they are the ones that are going to get hurt. it does concern me. i think corporate balance sheets look very good outside of energy. i think it is pretty safe to still be in there. >> i'm going to pile on to high-yield. you said the default rates are low. how long do you carry that trade? >> until the fed takes the punch bowl away. when you look back at the tendsy of when high-yield to correct and go through convulsions, it is after the fed has finished tightening monetary policy. then they have burst whatever bubble has occurred and then you have the deflationary spiral and high-yield collapses. i think we are several years away from that. you say we are about 65% of
the way through the current credit cycle. i know you see opportunities. where are we in europe's credit cycle? of the way.near 65% i think we are a third of the way through. the banks did well. it is not a surprise. they have been focused for the last five years. we were talking about spain earlier. for-five years ago, they were taking in deposits by posting 45% deposit rates. they got a lot of capital. i think there is some pretty good value in the european bond market and the punch bowl is not going to leave europe anytime soon. >> let's stick with europe. i want to read something back from your research note.
what countries are we talking about? >> i think you can look at hungry, turkey, those are the places that benefit in the current environment. >> regulators are increasingly concerned about the potential mass exodus from bond funds. how concerned are you about something like this? a career bond investor, i don't like to see anybody leaving bond funds. [laughter] there is no doubt that the exit can be crowded. one of the unintended a career bond investor, i don't like to see anybody leaving bondconsequences of thew regulatory environment is to increase dealer balance sheets. everybody is trying to think about where the new balance sheets to absorb outflows are coming from. is the petroleum bond. this is not the stock, it is the price of the bond. you made a lot of total return.
you have the coupon. 6% along the way. capital gains from 80 to 100. then you get this. your worry in your crowded market is that all of a sudden higher yield, this rolls over. is that a 2015 event or is that farther out? >> it should be the fed's worry. >> and our viewer's. >> it is a lot of people's worry. i go back to how the fed manages a normal station of interest rates. if they do it rudely -- have pricedd they in pretty accurately how they are going to do it, you can have a pretty good bond market and not an immediate rush. dudley'spport bill informed complacency versus what , hear from marty fritzen who is really worried about instabilities. , it is noteverything
all one and not the other. >> you can just answer that and say the san francisco giants [laughter] . [laughter] >> that is one of our top photos. this is our number three photo today. this is as, celebration for a convoy of peshmerga fighters in turkey. they are coming from iraq, through turkey, back down to syria. this is really important. not excited about allowing kurdish fighters from turkey. >> they need the economic and political stability there. >> they are stuck in a constant tap dance there. it is an islamic -- it is an islamic country, but also a nato member. two, busterber posey and madison bumgarner celebrate after defeating the
kansas city royals in game seven of the world series. madison bumgarner came in for relief. >> 185 pitches over two games. >> two days' rest. >> he is going to take a nice long nap. >> number one photo. picture of a steinway piano factory room. steinway is leaving its location for a space at midtown. they sold are building for $195 million and had until this december to vacate. i used to work in that building. there were concerts during the day. it was an amazing atmosphere to walk through. they are planning to move to the ground for -- floor of a new building on 43rd street in manhattan. >> it is right on the street from 157. there is a huge building killing and write down the street from
where the steinway factory is. cannot compete with amazing electric pianos, but that is the story about the cause of real estate. >> it is an interesting story. he can play any piano he wants and he plays a steinway. >> the ruble strengthening. strengthening the most since january 2010. the chart from earlier would go down just a hair. it is still near record lows against the dollar. it shows the jump condition coming off of what the fed does. the fed speaks and the world reacts. >> the dollar strength is a story when it comes to the ruble. we will be right back on "bloomberg surveillance." ♪
senate seats. odds are in their favor. we will check in with peter cooke with a look at the biggest election issues. senate races,he but what is the mood like in washington? thehere a feel that democrats are conceding. the author always been in the the oddsn costs -- republicans'een in favor. in hagan is still scrapping north carolina. republicans are the odds on --or on election day
favorite on election day. favor republicans, but it is not a slamdunk by any stretch. >> what about michelle nunn? she originally seemed like a total longshot. telling meepublicans that she has run the best campaign of any democrat. they don't want her to win, but she has run a great seat. if she wins, it would be a really impressive feat for a democrat in that state and it would certainly suggest the importance of that last name, her father used to be a senator in georgia. she has run a good campaign. that is not enough for democrats. they need to hold the line in other states. campaigning is secretary clinton in davenport and cedar rapids yesterday.
what is the reasoning and the why behind her effort next tuesday? is the mosthe popular democrat out there or one of the most. no more potent political force for democrats. president obama has been relegated to gubernatorial races in a small handful of states. hillary clinton is a help to democrats. elizabeth warren is a potent force as well. when you have elizabeth warren down in kentucky campaigning and hillary clinton, that tells you something about the force of those two political figures and a state that is a largely republican state. >> you know that power starts to shift in d.c. ahead of the election results. what are you seeing when you talk to people on the hill about who is going to be more powerful in congress after the election has taken place within the republican party? excited aree most
lobbyists in town. [laughter] any change in power, any change in the chairmanships, the gavel shift, means that there are now new targets, new dynamics, new parties, new palms to greece. -- grease. no question about it. it has been a little stale for lobbyists. you have to look at mitch mcconnell as the single most important player if mitch mcconnell wins his race and republicans win the senate. i'm looking forward to going down to kentucky myself for election day. >> thank you so much for the latest on the state of washington. >> trying to be smart on the midterm elections and get you prepared for 2014 and onto 2015. with all do respect, 5:00 p.m.
futures deteriorate. -70.utures, we welcome all of you. let's get to top headlines. >> growing sales of new medicines at bayer. they are raising profit forecast. samsung's quarterly net profit takes a sharp decline as they lose business to low-cost manufacturers. a decline of 49% versus one year ago. samsung is counting on wraparound screens to provide earnings. makes his official cleveland homecoming tonight. a seat in person will not exactly be cheap. for $758 onselling
average. that is a 14 fold increase in cleveland, when tickets cost an average of $53. >> i want to talk ohio municipal paper. are you a believer in the lebron omy? >> [laughter] i am. that is just the type of inflation central banks are trying to create. [laughter] >> you suggest that chris christie and lebron james? [laughter] >> i'm trying to help them out. >> the commonwealth of puerto rico had a particularly bad recession. high unemployment and high outward migration. there is good news, there is no banking crisis. quickwe want to get a
top-level assessment. the puerto rican economy, thumbs-up or thumbs down? i think it is neither. i think it is starting to stabilize. i think the economy is going through tough years of economic contraction. couple ofe last government administrations have been increasingly and incrementally doing what they need to do. capital inyou have your bank. what is it going to take for you to start lending? day, it isnd of the the economy. you need to have an economy that grows for banks to have the ability to grow their loans and be aggressive lenders. it still has to do with the economy. the day, we are seeing some stabilization opportunities in puerto rico's economy. >> what are things the economy can do? become moreto
competitive. one of the things they need to do is to energy reform. energy reform needs to happen. they passed a law and they are starting to implemented. the other one is tax reform. that is something the government needs to speed up. they need to reduce taxes for corporations and individuals. there are a lot of things on the to do list. puerto rico uses the u.s. dollar and the national minimum wage. how much of an effect a you see? >> it is the same as in the states. the dollar strengthens and it affects the economy in the same way. you mentioned a point on the minimum wage and that is actually something that the puerto rican government needs to consider, not to be tied to the increase of the minimum wage in the united states. >> another item on the to do list. much does ending qe factor into the equation? is the window of opportunity closing? will certainly have
an effect in puerto rico as interest rates start to creep up . we need interest rates down, as the rest of the world does, or particularly puerto rico >>. what is the anger level of the professional middle class in puerto rico? howe go into next year, angry are they about politicians fixing less? incrementally, they are becoming more and more angry or angrier. they are not as angry as i would have expected them to become a surprisingly. the private sector needs to continue to work together to get reforms. you need that catalyst internally rather than looking to washington. >> agreed. there is nothing that can be solved by looking to washington. we need to look internally, we need to work inside, the private sector needs to work together to get reform done. >> i want to read you something from a speech by william dudley of the new york fed. likely thatseems
any country in a similar debt situation would have faced difficulty in continuing to raise money in the bond market. it seems like reading through his entire speech from earlier this year that a lot of the problems stem from the same basic issue, which is that puerto rico is kind of a state and kind of a nation. would resolving the status fix things? an issue thatt is has been prevalent in puerto rico for the last 60 years. it is something that has been addressed for many years. frankly, the answer is not in puerto rico's fans. it is in the united states' hands. onis particularly focusing the economy. the status will be resolved, but before that, we need to resolve the economy and work on stabilizing the economy and making puerto rico more competitive. that is what really will get us into the direction of where the answer is on status. i understand that it is out of puerto rico's control. there has been a clear
indication that they want the resolution to be taken care of. around 50-50.d up at the end of the day, there is a gridlock in puerto rico from that perspective. at the end of the day, let's focus on the economy. it has been a long years. we as a bank have been working hard and successfully at managing the difficult scenario, but it is a grind. >> i hear there is an anniversary. we are celebrating 50 years of existence and 20 years of trading on the new york stock exchange. we are really excited and happy. >> you were san francisco giants orange today. >> it is the colors of oriental. the bank is orange, so we celebrate. [laughter] >> pose a fernandez, cautiously bullish on puerto rico. you are ringing the bell today? >> we are ringing the bell hard today. thank you for having me. >> thank you so much.
move, dollar ascended. after quantitative easing. hillary clinton out on the stump. and forget the fancy investment bankers. .ames dimon we are live from our world headquarters in new york. thursday, october 30. i am tom keene. always, scarlet fu and brendan greeley. exclusive news from "bloomberg businessweek." apple ceo tim cook is breaking his house in a new editorial, where he is announcing he is gay. denied myave never sexuality, i have never acknowledged publicly until now. so let me be clear -- i'm proud
to be gay and i consider being gay among the greatest gifts god has given me." why now, josh? >> he said it is something he has been thinking about for a while but not precipitated by an event. but he's very private and has always felt that his job is to guide apple. the way he told it to me, he walks into his office and there are 2 photos. one is martin luther king, one is robert f kennedy. some days those are an inspiration and other days there are a challenge for martin "life'sing's quote is most persistent challenge is what are you doing for others." he has had these conflicting values of privacy and wanting to lead and he alternately decided it is more important for him to step out in her present not only within the business community becausein the world,
apple is a global company, to say i am gay, i am proud. >> within this moment was the moment of alabama. this a catalyst? >> i don't think it was a catalyst. in his time as ceo apple is taken a decisive turn standing up for quality and transparency. not always the most popular decisions within the company. these values are consistent with the way estimating the company. at the same time this is a big step. not only for apple but for society and american business. >> for society and american business. there has never been in my searching a ceo, a fortune 500 ceo, who has stepped out and said "i am gay." the ceo of the most closely watched company in the world. >> here's a quotation from his essay in " bloomberg businessweeek."
andon't consider myself activist but i realize how much i benefited from the sacrifice of others. so if hearing that the ceo of apple is dated cannot someone -- his day can help someone struggling --" >> apple is a company that has long valued creativity and quality. he told me that he spoke to the himrd and the board gave complete and utter, full support. aboutk that one thing leaving apple is the desire for their product tends to trump prejudice. the point of it is that it is news today. his hope in all of our hope is that it does not become news at .ll
we have got marriage equality legalized in a majority of states. we have states that can evict you for being gay. >> to his comment on alabama. >> each person who comes out and drives progress forward makes those things less likely and less relevant. >> i was struck by the brevity of the article. was there a desire on the part of mr. cook to write a longer essay? >> no, he was very clear on what he wanted. the backstory was simple. he called and asked if he could come out. we had a conversation and it was crisp and clear and i hope he is available for more assignments going forward. he was very easy to work with on this. he knew what he wanted to sa y. at this point there's not much more necessary. on thedo that article
new apple. how does this announcement fit into the new group leading apple? is going tohink it be very big news with an apple. plenty of people know that he is gay. treated him -- he has never tre detec anyone treating him differently. there are people who will be happy for him, and by 9:05 fold it back to the work they have to do. another quotation from this essay by tim cook in "bloomberg businessweek." "i continue to spend virtually all of my waking time focused on .eing the best ceo i can be part of social progress is understanding the prison is not ,nly defined by one's sexuality race, or gender. i'm an engineer, and uncle, a nature lover, a fitness nut, son of the south, a sports fanatic, and many other things. i hope people will respect my
desire to focus on the things i'm best suited for and the work that brings me joy." ramificationshe of this as a particularly within the political dialogue as we go into the elections? >> my guess is that there will be a lot of congratulatory phone calls heading to cupertino today. a lot of people recognize this is leadership. >> i think john brown of virtually, what he went through -- of british petroleum, what he went through for decades. >> but ultimately he was forced out of the closet and nobody wants to be in that position. we are at a place where society is genuinely leaning towards equality. it is a door that is already opening and can be pushed on. politically he will be receiving calls from barack obama. a lot of people will be rooting for this story to be a positive thing. triangiel "bloomberg
businessweek." gay.let's get to our other top headlines. suggest that the economy started to end its asset purchase program known as quantitative easing. of dollarsd a joins to the fed's balance sheet and vegetable market and i -- fed people market inequities in treasuries. here is the former fed governor. >> i think they will be quite measured and when they start raising rates. my guess is that it will be in the second half of next year. it depends on how inflation is false -- inflation evoles. 131%e market has clung to since the first of quantitative easing. memories of the cold war in europe this week. nato fighters are scrambled several times to intercept russian plane maneuvers.
overfloweds have not nato territory. the confrontations, and a time when the west is highly critical of russia for its role in the fighting in ukraine. moscow is not commenting. >> in maine, the governor says he will try to force lenders to abide by the states ebola quarantined. casey hickox was quarantined in new jersey and showed no symptoms other than a brief weaver-- fever. she has returned to her home in she has beene and ordered to stay in her home but she says she won't do it. president warned that quarantines and travel bans. ebola. he met at the white house with health care workers who returned from africa or are about to go there. want america to understand, until we stop this outrage in west africa, we may continue to americavidual cases in in the weeks and months ahead.
because that is the nature of today's world. we cannot hermetically sealed ourselves off. >> the president was meeting with health care workers who have either been to africa or are going there. >> very good. baseball game seven, it was really, really something. the giants lead the dreaded royals 3-2. madison bumgarner on the mound for san francisco, he gets mr. perez to pop up. it is all over the giants to win their third world series in five seasons. bumgarner brilliant in relief, truly extraordinary. a nice relief. absolutely spectacular. koufax, back to sandy takes me back to christie matheson. "the new york times" had a great review of at this moment. .> is quite remarkabl he played in the world series and had a .025 era.
of course use m.v.p., but coming in like that is remarkable. >> baseball becomes a national story again. >> after really struggling in the world series. what a way to end. we will come back with peter coy of "bloomberg businessweek" on janet yellen, and looking to 2015 on investments and jobs as well. >> as we look ahead to jobs because the jobs report comes out next friday, our twitter question of the day. you.nt to hear from should the government push for bachelors degrees or friendships? -- apprenticeships? ♪
about keynes. he was at bretton woods and said to go international. >> we can see today what was happening during the final waning years of world war ii. today we have terminate, the today webest germany -- have germany, the world's biggest account surplus. then, it is visiting .nternational coordination >> who is going to advise germany to be more like john maynard keynes? >> they're hearing a lot of it from other countries. international monetary fund, which had always been the austerity camp, and i have a quotation from somebody in the
imf in my story. cry in 2008 it was that we are all keynesians now. it has been five years. who's calling that we are keynesians again? are you trying to start this movement? >> it waxes and wanes. as the economy seems to be recovering you heard less and less of this. but some of those voices are coming back. >> our people in the hedge fund world saying "we are all keynesians now"? view the private industry is the main contributor to wealth creation -- >> i would suggest that the foxholes the the hedge fund industry is in have
18-year-old scotch. [laughter] this is great. peter coy, thank you so much. very important article. driving forward that mediocrity that a lot of people are talking about. that isn't "bloomberg businessweek. -- that is in "bloomberg businessweek." look for it today. tim cook announces he is gay as well. futures are negative nine. it is "bloomberg surveillance." ♪
>> this is "bloomberg surveillance." i am scarlet fu with tom keene and brendan greeley. almost 5 million jobs not being phil because employers cannot find the right workers. the problem, skills mismatch. chauncey lennon heads of the workforce program at the jpmorgan philanthropy group. jpmorgan is rolling out reports
examining the skills gap across u.s. cities as well as european countries. before talk about cities specifically, the focus is on middle skill jobs. is that the old middle class jobs? >> it requires a high school degree>>, pencil training, sometimes as short as a certification course, but not a ba >> apprenticeships would seem to be an obvious solution. germany has done a very well to great effect, as brendan reminds us. why is there resistance to apprenticeships in the u.s.? >> those are often in the trades. like health care and technology into new york, which is where he first focuses on good getting the middle skill job,, like preparing patient trays at the hospital, is a good step, but just the initial step. what is being done to make sure that people develop his skills so they are not doing it five
years later? >> they are good paying jobs to start off with. a job and health care tech tended to more advanced jobs. >> what was the impetus behind the report? who came to you and said that this is what we need? >> we spent our time coming to businesses and we heard from our business clients that we need a new skilled workforce. >> there is no shortage of ads for services and schools that will get you to this level of qualification. there is a market out there. why is that market failing? >> training is linked to demand. oftentimes when you see ads it is not clear that those services are linked to real employer demand. we need a system where players can visit table and say "here is what we need." >> this dovetails dutifully -- on the westside you want to play
16,000 jobs in new york city. i understand highfalutin guys who do beautiful academic heritage and williams and columbia and all you have done. but there is a lot of other people, part of that 16,000 would have been and has enormous -- at hudson yards, right? >> again, we look across the economy and loss of sectors -- >> these people are everywhere. >> middle skill jobs cut across the economy. is profound how every single industry, even hedge funds, have these people involved. >> certainly, but there's pushback that a lot of people worry about. >> a lot of the jobs, middle skill jobs, our people we deal with all the time. the jobs that can't be outsourced. at the end they the day have to pay more wages and they require more skills. topic and a terrific
the work you have done is phenomenal, but what is the to do? plan so thatction americans who are excitement and say "we want the jobs" -- who are anti-immigrant say "we want to jobs"? >> we have to make sure that the training options -- how do we get some of the skills that the employer needs? first basislike the to get people to graduate high school in new york city. is there a report coming out on that, too? >> we support lots of efforts to make sure people complete high school. high schools also can be part of this. in new york city, cities across the country are focused on career tech. >> like math. i mean, come on, every single thought you were talking about, they start out of 50 decibels,
60,000, $70,000, and can work into a real career -- i'm sorry, they are all math based at some level. >> we need more advanced secondary trend. employers are not going to look for someone who went to high school and konows math. point, orscarlet's those jobs have been filled by immigrants or are they just not being filled? >> is not an immigration versus nonimmigrant issue. it is about finding people with the right skills. >> are these jobs being created because we are six years on from the financial crisis and it is getting better or because the labor costs are higher elsewhere? >> a lot of shifts taking place. we see all these trends occurring. employees just can't find people to fill the position. >> you look at broader economic trends. one thing i'm wondering about is that we have the skills gap in new york city.
we also have the geographic mobility we used to. >> geographic mobility was at its low point in the dark days of the crisis when so many homeowners are underwater. the last three or four years, down from around 13 million to 5 million out. mobility is picking up which is a good sign. we just have a mismatch in this country between my types of people -- what skills people need to succeed and what is sensationalized by the media and higher education with liberal arts degrees. >> i sat in a restaurant yesterday and had a greek salad, no onions, no peppers. i look at every single worker busting their but around me. one but one is what i would perceive as a "immigrant." they take the jobs because they work their butts off. >> that is one way of looking at it.
speak to the chief executive at 7:30 weclaris -- speak to the chief executive officer of polaris. >> we start with breaking news. apple ceo tim cook breaks his silence in a new editorial in "bloomberg businessweek," where he announces he is gay. he says that while he has never denied his sexuality, he has never publicly acknowledged until now. "i consider being gay one of the greatest gifts god has given me." are planningerga to battle. to a turkishding state-run news media. and lebron james makes his cleveland homecoming tonight, and seeing it in person will not be cheap. tickets for the
kvaliers' matchup with the average $353. >> cash or cash positive for day one with cleveland? >> there is investment going into the city. it is not just about the cavs, it is about people moving downtown and going back to the arena again. >> thank for the cleveland browns. we go to our football expert. is a big boost for city that needs it. >> they are trying to revitalize the downtown area and this is a big step for the franchise. the signs so far have been positive. >> you, me, brandon, scarlet, only 3000 bucks out of our pocket. you could go there tonight. >> i went to go over this -- thus far on "surveillance" you have asked for a trip to san juan and all-expenses-paid to
lebron. >> we have not even gotten to the indian motorcycle yet. [laughter] excuse me, let's get serious. >> today's charges on the four x factor. by dollar-based investors in emerging markets. thank you to the emerging markets change at blackrock for this chart. on the the set of bars left. 76% in the past decade. 22% of risk. people like cfa-level three exam -- people flunk cfa level three exams. do you have this or do you go to church and pray? >> we would argue to avoid it altogether.
you will struggle from both currency risk and the fact that it is still in a period of underperformance. from 2003 2 2700 he forgot about currency risk. now that the fed is less lose and maintain you may see the opposite effect. >> do you agree that strategies to limit the risk usually don't pay off? >> over 10 to 20 years, that is correct. >> level four. >> over a very long period of time those currency fluctuations smooth out. >> it also keeps wall street employed. >> job creation. --inking is a cash keynesian keynesianism. >> do we see the dollar strengthening as it takes over as a trend? >> oftentimes they are forced by technicals.
emerging market growth has been disappointing. quick start -- we expect the convergence will continue to the downside. far stronger on a relative basis that they were three to four years ago. the author of this chart at blackrock said something interesting. -- policymakers pay a price because nobody trusts them to do the right thing. right now there is more of a discount than three years ago. big picture folks are less worried about whether the get the policy right or whether it will grow less than a year ago. >> which foreign exchange is the biggest disaster coming? >> the biggest reason disaster is obviously in brazil.
that is because of the useff woulds that ro lose led to this big runoff. brazil is in a very, very tough place. >> let me do a data check right now. visx, 15.15. >> this is "bloomberg surveillance." i am brendan greeley with scarlet fu and tom keene. polaris has been making snowmobiles and off-road vehicles for years. they hope that this will be a cultlike everywhere. andt wine is the ceo chairman and he is an annapolis grad and i always think that is important to point out. >> barely. >> there but for the grace of god. i want to talk about the price of oil. as things get cheaper the move up to a car. how does the price of oil affect your expansion plans? >> the price of oil is important for our businesses.
india specifically, i want to clarify that we do not own royal enfield. we have a partnership that we are excited about. i would like to own the brand but they won't sell it to me. mumbaimailed a friend in who is a motorcycle guy. i am not a motorcycle guy could but he says that this is the one that hero -- honda hero. >> gas mileage is much more reporting for bikes in india than in any other part of the world. we are excited about our future and our partnership will give us lots of products, not just motorcycles, to grow our business in india. >> i want to talk about snowmobiles. i love the one you brought for me today. riderws likend up me to you cannot means this stuff fast enough. >> it is a good time --
>> why is this? >> in every one of our businesses it is because the hard work they do on innovation. >> what is the innovation of something that makes so much noise you can't even hear straight? >> you get that combination of power and weight. what we do better than anyone else's bioactive writing experience. >> they are always in silence. >> keep doing that and i will ask a question. warm winters in russia and norway -- do you have a global warming strategy selling sleds? >> the u.s. was really cold and quite snowy last year. we have an electric vehicle business which is about $200
million, a growing part of our portfolio. we will position ourselves to win on the oil prices are. >> you wake up everyday competing with harley davidson. what are the best practices of their heritage that you bring over to the indian brand, which has even more heritage? >> what they have done so phenomenally well is build up an acredibly strong brand and loyalty to the consumers want to be part of with the greatest division strategy. -- great this division strategy. bikes, great styling, and we are excited about the future of the business. >> i hear you guys talking about motorcycles. i would not let my boys anywhere near that because of the tales of death and destruction. our motorcycles and general safer now than a generation ago? >> people are more aware from a
riding perspective. motorcyclists have to take responsibility for it. with helmets becoming a lot more states it is becoming safer. >> but there's nothing you can do mechanically with the vehicle to change how it is. >> oh, there is. making the writing and handling that does exactly what you expect it to do makes it a safer ride. motorcycleeen 4 accidents and all four of them were because of idiot riders. >> do you ride a hog? >> no, i don't. my wife agrees with scarlet, they are very dangerous. >> seriously, you have to deal with this every day. >> all of our products. our rangers have roll bars and seatbelts and we encourage -- we strongly encourage everyone to wear helmets. ourmately we were to make products as safe as they can possibly be. >> ligety injuries the entries
as you know, "surveillance" is about economics, finance, and investment. we do international relations, too. amid the new volatility is the simple question of the old formula's work. amid it all corporations still make money. how ugly is it out there? >> from an economic standpoint it has improved substantially. >> what about the volatility in hedge fund business and investing? >> hedge funds have had a tough six weeks. the better performing guys last year are probably flat to down five this year, which is disappointing. certainly underperforming equities. >> are we had a point where many hedge funds will go out of business because they're never getting back to their so-called
hurdle rate? >> it us not as -- it has not been substantial enough. rn.re is always chu >> i would suggest that the media has been gloomy about the overall industry where it has been ugly but not that ougly. >> last year, you got some of the gains back and people are not going to kill you. mediocre to seven or five years than you deserve -- >> first common sense i've heard about this in six weeks. the world is coming to an end. >> we were e-mailing yesterday and you don't see anything that is earth shatteringly attractive. isn't it your job to find something attractive or stuff money in a copyca -- coffee can? >> you can't reach for 20% or 15% returns unless you take a tremendous amount of risk. you are better off in this
environment to grind it out. >> grind it out. >> somebody came on "surveillance" and said that you don't get returned without risk. amazing, and honest man! >> breaksclusive. entrance of the opportunities created by the turmoil, are those opportunities that you can ride through the rest of the year? >> there's a lot of liquidation to the multi-strategy fund. a lot of those names should bounce back, provided we don't have another leg down in the correction. over the longer term, the best opportunities are taking advantage of the banking system. there's no more cross-ice competition, no more market-making balance sheet. mortgage backed securities -- >> for people who facilitate your world, they're called prime brokers. businesses arers' doing better because we have more leverage going on.
prime brokerage is our strong, stable businesses that make money -- >> i've got like eight more questions. >> we've got to run? >> no, i've got a million more questions for troy. we have got to get you to next tuesday could "with all due respect" on the midterms, that tonight. it is "bloomberg surveillance." ♪
>> julian robertson, speaking with hedge funds for tiger management, inventor of the concept of hedging to make money . look for that tomorrow at 7:00 a.m. on "bloomberg surveillance ," on bloomberg television and bloomberg radio as well. we say good morning to all of you. brendan greeley and scarlet fu. as you heard earlier this morning, a bloomberg exclusive. apple's chief executive officer -- cook egging his island and breaking his silence in a new editorial, nsa for "bloomberg businessweek -- an
essay for "bloomberg businessweek" stating he is gay. i see it on twitter already, the response to this, pro and con. it has become less of a big deal than it was even 12 months ago. >> it struck me, he came out the same way that anderson cooper did, almost casually and accidentally. anderson cooper wrote an e-mail to andrew sullivan, where he said "i am gay, it is never something that troubled me." neither of them was forced out. their own consciences drove them to be an example for others. it was a dramatic, and that is a huge shift. ryiangiel flying out to
meet tim cook. i go back to a week or so in alabama where he was not as overt as this "bloomberg businessweek" sap made clear that the time is to change. >> he is thinking about his legacy as well. he's the ceo of the most powerful, some would say, company in the tech world, certainly in the u.s. he is thinking about what it means to come out and say that he is gay and what kind of inspiration he can provide to others. "out" magazine had placed tim ofk on the top of its list powerful gay men and women in the u.s. for three years straight. there a lot of percussion after -- percolation out there. among tech a lot writers about figuring out who tim cook is. --m looking at this as a non this essay now and he talks about what it has taught him to
be, and that "being gay has given me the skin of a rhinoceros, which comes in handy when you are the ceo of apple." johnu and i remember brown, british petroleum, who do not have the societal advantages mr. cook mr. cooper has. john brown was really in a time when you did not talk about this at all. >> society had much dimmer views on that situation. personally we think it is great that somebody was to articulate their orientation, they can, and if they don't, that is great, too. it is great to see society evolved that way. it is shocking that an alabama -- huge, there is still division in the nation. >> this is after the supreme court punted and decided not to take up gay marriage, leaving it s --he state
>> the big issues not people like tim cook or alabama area it is places like brazil. >> maybe russia. ?> russia much more to come more draconian --russia much more draconian. >> trevor burgess made some headlines and you wonder how others in the business community will respond to mr. cook's announcement als. as josh mentioned, the international visibility has real ramifications. >> trevor burgess was the first openly gay ceo of a publicly traded bank. >> and it is right over to sports as well to > this may sparked a rush for the closet door. this is a great thing that -- this is a great thing that -- brave thing that tim cook did. >> you have seen people do it in
the nfl. have they done it in mlb? >> no, only after the fact. >> ceo's of powerful companies are doing it. >> we on our way to does not being that big of a deal. >> you have been on wall street for years and i think of wall street and particularly new york city as having leadership. >> that is exactly what it should be. whether somebody wants to discuss with you what their preferences are, that is their business. you should have no impact on anyone's life other than with their friends and family. >> republicans are running away from this issue. they don't want to answer questions about it. >> they should be. >> they should be, but as recently as 2004, only a decade ago, such a change on this. they push this onto the ballot as an issue and now they just
want this to be gone and settled. >> list of things that republicans don't want to talk about is growing. this is one of them. you have dealing with minorities. the majorities now the minority -- >> mr. cook writing this essay for "bloomberg businessweek." "i am proud to be gay." look for that on bloombergbusinessweek.com. there we are. scarlet, futures -11 right now. >> let's do the other stories we're focused on as well. granted, you are looking -- brendan, you are looking overseas. >> vladimir putin is like a kid with toys. >> submarines in the water. outside ofipelago
stockholm. he is doing as much as he can to see how he can annoy nato. >> what is next for vladimir putin? on my agenda, third-quarter gdp comes out at 8:00 a.m. and the consensus among economists we have surveyed is for growth of 3%. the second quarter was stick-back for the birth -- was payback for the performance of the first quarter. >> we are five days away from the agenda item. let's call it the midterm elections. what we're seeing is people out on the stump. the president is in maine today, is that right? iowatary clinton was in yesterday, davenport and cedar rapids as well. the president will be attending -- >> it is more interesting where he is not going. >> in april it gets above 30. is a democratic president campaigning right now but his name is bill clinton. >> there you go.
>> we have twitter question. >> shouldn't the government push for bachelor's degrees or apprenticeships? author responses. here -- lots of responses. here are the answers. >> ooh, shot across the bow! >> i like it. >> a lot of antagonism for academia. whoa! >> get a college degree, get an apprenticeship? >> get a college degree in something useful to society. >> what was your useful degree in? >> chemical engineering. >> and what you are doing is so
connected to chemical engineering. >> it is not but you have to be analytical. >> remember sitting in organic chemistry when everyone else was having fun? >> your kid comes to you and says "dad, i want to be a journalist"? >> well, no, journalism is productive to society. >> yay! [laughter] >> whoa, whoa. >> disseminating information is useful. but there are only so many openings for those types of people. >> it is the only thing i could do with a degree in german. >> translator. >> degree in chemical engineering. degree in what? >> biology. >> there is something to be said about the liberal arts. >> chemical engineering is a really great. >> than -- is a real degree. >> thank you so much. >> futures are negative 10.